# effect - Effective Annual Interest Rate EFFECT The...

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Effective Annual Interest Rate – EFFECT The effective annual interest rate can be calculated using Excel’s EFFECT function. See the table below for a detailed list of the exercises and problems in the text that can be solved using this function. This function is included in the Analysis ToolPak. Syntax =EFFECT(nominal rate, number of compounding periods per year) General Example The following general example shows how the EFFECT function can be used. Notice that the EFFECT function appears in the formula bar. 1

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Using the EFFECT Function in a Spreadsheet To calculate the effective annual interest rate, create a spreadsheet by following Steps 1 to 7. Or, to use the EFFECT function right away, open the EFFECT worksheet in the Excel Functions Templates workbook. All fields have been formatted for you (currency, percentage, number of decimals displayed). Step 1 : Enter EFFECT Function in cell A1. You will replace EFFECT Function with your project title when you use your spreadsheet for a particular question or situation. Step 2 : In cell A3 enter Nominal Annual Interest Rate . In cell A4 enter
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effect - Effective Annual Interest Rate EFFECT The...

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